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on Insurance Economics |
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Issue of 2018‒11‒26
eighteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Conti, Gabriella (University College London, Department of Economics); Ginja, Rita (University of Bergen, Department of Economics); Narita, Renata (University of São Paulo, Department of Economics) |
| Abstract: | Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-indifferences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government’s cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent. |
| Keywords: | Search; Household behavior; Health insurance; Informality; Unemployment |
| JEL: | D10 I13 J64 |
| Date: | 2018–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2018_006&r=ias |
| By: | Gabriella Conti; Rita Ginja, Renata Narita |
| Abstract: | Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-indifferences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government’s cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent. |
| Keywords: | Search; Household behavior; Health insurance; Informality; Unemployment |
| JEL: | J64 D10 I13 |
| Date: | 2018–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2018wpecon18&r=ias |
| By: | Lan Thi Thu Phan (Viet Duc University Hospital); Yusuke Jinnai (International University of Japan) |
| Abstract: | Vietnam has achieved several Millennium Development Goals of the United Nations including child mortality reduction and maternal health improvement. The government of Vietnam aims to further improve health in Vietnam by expanding its public health insurance system originally introduced in 1993. Since health insurance is an essential tool to prepare for unexpected health shocks, the government plans to provide a public insurance system to cover eighty percent of its population by 2020. However, whether having health insurance is beneficial remains unclear and controversial. Some recent studies find positive impact of health insurance, while others argue that the quality of its services has been low due to limited coverage. In contrast to previous papers on Vietnam's health policy that use data from nationwide Vietnam Household Living Standard Survey, this research uses more detailed, randomly-selected, patient-level medical records from Viet Duc University Hospital, the largest public surgical hospital in Vietnam. Using precise information on each patient's treatment history and usage of health insurance, this paper provides new empirical evidence on the effect of health insurance. Regression analysis shows that insurance helps patients stay 1.6 days longer in hospital and pay 48.6 percent less for their treatments than uninsured counterparts. This study also finds that financial burden between the insured and uninsured patients is larger in rural provinces than in the capital-city Hanoi, suggesting the significant advantages of health insurance for people in under-developed areas with fewer public hospitals. These new findings from patient-level information in Vietnam contribute to the growing literature on health insurance policies in developing countries and are particularly informative when governments plan to introduce nationwide public health-insurance systems. |
| Keywords: | Health insurance, treatment, length of stay, out-of-pocket payment |
| JEL: | I13 I12 I10 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iuj:wpaper:ems_2018_01&r=ias |
| By: | Hjellset Alne, Ragnar (University of Bergen, Department of Economics) |
| Abstract: | Using a difference-in-difference model on full population data, I estimate the labor market response to a 2015 Norwegian disability insurance (DI) reform. The reform introduced an incentive program to encourage DI beneficiaries to increase their labor supply, and I find that the program significantly increased the average working hours and modestly affected the labor market participation of DI beneficiaries. There is significant heterogeneity in the estimated effects; young beneficiaries respond positively along the extensive and the intensive labor supply margins. The analysis accentuates the importance of analyzing both labor supply margins when evaluating the effects of DI reforms. |
| Keywords: | Disability insurance reform; labor supply; economic incentives; difference-in-difference; labor economics |
| JEL: | D60 H53 I38 J08 J22 |
| Date: | 2018–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2018_002&r=ias |
| By: | Njue, E.; Kirimi, L.; Mathenge, M. |
| Abstract: | In spite of agriculture being an important source of income growth and a potential source of investment opportunities in Kenya, farmers face numerous production risks including climate change and variability. While literature suggests that crop insurance has the potential to unlock key services that enhance farm productivity, crop insurance uptake evidence is limited, hence, this study sought to inform on ways of making crop insurance work for the smallholder producers. Data was collected from 400 maize-producing households in areas where weather index-based insurance had been promoted. Results show that uptake of crop insurance is very low and declining and, the insurance concept is also not well understood by farmers. In addition, basis risk hinders uptake of crop insurance since farmers exhibited high levels of dissatisfaction with claim payments. Furthermore, awareness and training on crop insurance, density of automated weather stations and ownership of savings account are integral factors in enhancing its uptake. Our findings therefore highlight the need to educate farmers on the principles of crop insurance and different products that exist. Similarly, designing of crop insurance products and selection of target crop enterprises should involve all stakeholders to enhance uptake. Acknowledgement : |
| Keywords: | Risk and Uncertainty |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277023&r=ias |
| By: | Grzegorz Strupczewski (Cracow University of Economics) |
| Abstract: | The aim of the paper is to present the current state of the cyber insurance market. Based on recent industry reports, we identify its opportunities and threats, and discuss the most important challenges that have to be overcome by the insurance industry. The role of cyber risk reinsurance in providing capacity for insurance carriers is also shown. Finally, we try to identify current trends in demand for cyber coverage and verify if all needs of cyber insurance buyers are satisfied. In order to attract more cyber insurance customers, insurers should at least: clarify the language and the scope of cyber insurance policy, expand the advantages of cyber policy beyond simple risk transfer, develop personal cyber insurance offer. |
| Keywords: | cyber insurance, cyber risk, cyber reinsurance, insurance market |
| JEL: | G22 K13 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:6910062&r=ias |
| By: | He, Huajing (University of Essex); Nolen, Patrick J. (University of Essex) |
| Abstract: | This paper estimates the impact of a health insurance reform on health outcomes in urban China. Using the China Health and Nutrition Survey we find that this reform increases the rate of health insurance coverage significantly among workers in Non-State Owned Enterprises. The double difference (DD) estimations show that the reform also leads to better health outcomes: workers are less likely to get sick and more likely to use preventive care. Using an instrumental variable (IV) approach to look at the causal effect of health insurance, we find those with health insurance use more preventive care but do not report significantly better health outcomes, an increase in health care utilisation, or an increase in out-of-pocket medical expenditure. |
| Keywords: | health insurance reform, health outcomes, China |
| JEL: | H51 H43 O2 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11892&r=ias |
| By: | David C. Wittenburg; Jeffrey Hemmeter; Holly Matulewicz; Lindsay Glassman; Lisa Schwartz |
| Abstract: | This article examines differences between survey- and administrative data–based estimates of employment and earnings for a sample of Social Security Disability Insurance and Supplemental Security Income beneficiaries. |
| Keywords: | survey- and administrative data–based estimates of employment and earnings, Social Security Disability Insurance , Supplemental Security Income beneficiaries, National Beneficiary Survey |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:b606f33e156040c99a34fb4ed3a889d5&r=ias |
| By: | Danielle Chelminsky |
| Abstract: | The Centers for Medicare & Medicaid Services (CMS) uses a five-star quality rating system to evaluate the performance of Medicare Advantage (MA) health plans. This guide is an overview of the Star Rating system and how it helps beneficiaries, payers, and others to compare plans across multiple dimensions. CMS publishes the Star Ratings each year to help beneficiaries find the best plan for them and to determine MA quality bonus payments to plans. |
| Keywords: | Medicare Advantage, Star Ratings, Dual Eligible, Quality Measures, Dual-Special Needs Plans, Performance Measures |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:e6c6f62fa5f34772bd51024f0dd610f3&r=ias |
| By: | Juan Pablo Atal (Department of Economics, University of Pennsylvania); Hanming Fang (Department of Economics, University of Pennsylvania); Martin Karlsson (Department of Economics, University of Duisburg-Essen); Nicolas Ziebarth (Department of Economics, Cornell University) |
| Abstract: | We study theoretically and empirically how consumers in an individual private long-term health insurance market with front-loaded contracts respond to newly mandated portability requirements of their old-age provisions. To foster competition, effective 2009, German legislature made the portability of standardized old-age provisions mandatory. Our theoretical model predicts that the portability reform will increase internal plan switching. However, under plausible assumptions, it will not increase external insurer switching. Moreover, the portability reform will enable unhealthier enrollees to reoptimize their plans. We find confirmatory evidence for the theoretical predictions using claims panel data from a big private insurer. |
| Keywords: | individual private health insurance, portability, old-age provisions, health plan switching, switching costs, health policy reform, consumer bargaining, retention |
| JEL: | G22 I11 I18 |
| Date: | 2017–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:17-012&r=ias |
| By: | Tim Murray |
| Abstract: | Many retirees retain their housing equity until they die and do not utilize it to help finance spending on consumption. In this paper, I examine how older Americans (age 55+) may use their house as a form of precautionary savings in the event they face an increase in out-of-pocket medical expenses due to a health shock. I find that households are 12-percentage points more likely to own a home in their late retirement years if they might face an unexpected increase in medical bills, indicating that many of such households prefer not to own but choose to knowing they may get sick and face an increase in out-of-pocket medical expenses. Accordingly, I propose an insurance policy that would cover any out-of-pocket medical expenses not covered by Medicaid. When the price of the insurance policy is between 0.15%-0.50% of each householdâs house value, 12.8% of households purchase the insurance policy. In the presence of an insurance policy and health shocks, the homeownership and moving rates look like an economy without health shocks, thus correcting a possible market failure that causes households to use their house as a form of precautionary savings. |
| JEL: | D14 E13 R21 |
| Date: | 2018–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2018:pmu533&r=ias |
| By: | Jonathan Brown; Junqing Liu; Sarah Hudson Scholle |
| Abstract: | Studies have consistently documented high rates of obesity and tobacco use among individuals with serious mental illness. |
| Keywords: | Health maintenance organizations, Obesity, Patient needs, Primary care, Smoking |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:bfeaa96c869f42129ef91423132915d9&r=ias |
| By: | Kim, Seonghoon (Singapore Management University); Koh, Kanghyock (Ulsan National Institute of Science and Technology) |
| Abstract: | We study the effects of Massachusetts' healthcare reform on individuals' subjective well-being. Using data from the Behavioral Risk Factor Surveillance System, we find that the reform significantly improved Massachusetts residents' overall life-satisfaction. This result is robust to various sensitivity checks and a falsification test. We also find that the reform improved mental health. An additional analysis on the Tennessee healthcare reform supports our findings' external validity. Using the reform as an instrument for health insurance coverage, we estimate its large impact on overall life-satisfaction. Our results provide novel evidence on the psychological consequences of Massachusetts' healthcare reform. |
| Keywords: | health insurance, life satisfaction, happiness, subjective well-being, Massachusetts healthcare reform |
| JEL: | I13 I18 I31 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11879&r=ias |
| By: | Laurent Cappelletti (ISEOR - Institut de Socio-économie des Entreprises et des ORganisations - Institut de socio-économie des entreprises et des organisations); Nicolas Dufourg |
| Abstract: | The article introduces the Solvency II Directive, setting out the new prudential framework for insurers, to study the management of the integration of this new normative framework so that it can effectively control risks. The underlying assumption of the research is that the integration of a new normative framework must be managed in an adapted way or else it will not achieve its objectives. Such an hypothesis challenges in a way the neo-institutionalist theory for which the question of the managerial mecanisms allowing the integration of norms is somewhat let down. The study is based on an intervention-research within a French mutual. The results indicate that the Directive, subject to a management approach facilitating principles of orchestration, arbitration, negotiation and ethics, strengthens the risk management system of mutual insurance bodies. Although a bigger complexity of the management system of the company is observed. |
| Abstract: | L'article porte sur la directive Solvabilité II, fixant le nouveau cadre prudentiel des assureurs, pour étudier la façon de manager ce nouveau cadre normatif de maîtrise des risques. L'hypothèse sous-jacente de la recherche est que l'intégration d'un nouveau cadre normatif se gère de façon adaptée sous peine de ne pas atteindre ses objectifs. Elle questionne ainsi la théorie néo-institutionnaliste qui élude, d'une certaine façon, les mécanismes managériaux d'intégration des normes. L'étude est fondée sur une recherche-intervention menée au sein d'une mutuelle française. Les résultats indiquent que la directive sous réserve d'un management adapté de son intégration fondé sur des principes d'orchestration, d'arbitrage, de négociation et d'éthique renforce la maîtrise des risques des organismes d'assurance mutuelle, tout en impliquant néanmoins une complexification des modes de gestion. |
| Keywords: | Solvency II,insurance,mutual insurance,risk management,management of standards and norms,prudential standards,tetranormalization,Mots clés : Solvabilité II,assurance,mutuelles,maîtrise des risques,management des normes,normes prudentielles,tétranormalisation |
| Date: | 2018–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01907802&r=ias |
| By: | Aga, B.K.; Tesfay, G.B. |
| Abstract: | What is the optimal size and composition of Rural Savings and Credit Cooperatives (RuSACCOs)? With these broader questions in mind, we characterize alternative formation of RuSACCOs and their implications in improving rural households access to financial services, including savings, credit and insurance services. We find that some features of RuSACCOs have varying implications for delivering various financial services (savings, credit and insurance). We find that the sizes of RuSACCOs have nonlinear and varying implications across the various financial services that RuSACCOs provide. We also show that compositional heterogeneity among members (including diversity in wealth) is associated with higher access to credit services, while this has little (no) implication on households savings behavior. Similarly, strong social cohesion among members is strongly associated with higher access to financial services, particularly savings and credit access. These empirical characterizations suggest that the optimal size and composition of RuSACCOs may vary across the domains of financial services they are meant to provide. The results provide some insights into rural microfinancing operations and saving cooperatives which are striving to satisfy members demand for financial services. Acknowledgement : The authors gratefully acknowledge the financial support from the International Growth Center (IGC) through the Ethiopian country program. We also appreciate the support and comments from the IGC Ethiopia team. All remaining errors are ours |
| Keywords: | Financial Economics |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277735&r=ias |
| By: | Bourles, Renaud; Bramoulle, Yann; Perez-Richet, Eduardo |
| Abstract: | We provide the first analysis of the risk-sharing implications of altruism networks. Agents are embedded in a fixed network and care about each other. We study whether altruistic transfers help smooth consumption and how this depends on the shape of the network. We identify two benchmarks where altruism networks generate efficient insurance: for any shock when the network of perfect altruism is strongly connected and for any small shock when the network of transfers is weakly connected. We show that the extent of informal insurance depends on the average path length of the altruism network and that small shocks are partially insured by endogenous risk-sharing communities. We uncover complex structural effects. Under iid incomes, central agents tend to be better insured, the consumption correlation between two agents is positive and tends to decrease with network distance, and a new link can decrease or increase the consumption variance of indirect neighbors. Overall, we show that altruism in networks has a first-order impact on risk and generates specific patterns of consumption smoothing. |
| Keywords: | altruism; Informal Insurance; networks; Risk Sharing |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13164&r=ias |
| By: | Yoichi Arai; Yu-Chin Hsu; Toru Kitagawa; Ismael Mourifie; Yuanyuan Wan |
| Abstract: | We propose a new specification test for assessing the validity of fuzzy regression discontinuity designs (FRD-validity). We derive a new set of testable implications, characterized by a set of inequality restrictions on the joint distribution of observed outcomes and treatment status at the cut-off. We show that this new characterization exploits all the information in the data useful for detecting violations of FRD-validity. Our approach differs from, and complements existing approaches that test continuity of the distributions of running variables and baseline covariates at the cut-off since ours focuses on the distribution of the observed outcome and treatment status. We show that the proposed test has appealing statistical properties. It controls size in large sample uniformly over a large class of distributions, is consistent against all fixed alternatives, and has non-trivial power against some local alternatives. We apply our test to evaluate the validity of two FRD designs. The test does not reject the FRD-validity in the class size design studied by Angrist and Lavy (1999) and rejects in the insurance subsidy design for poor households in Colombia studied by Miller, Pinto, and Vera-Hernández (2013) for some outcome variables, while existing density tests suggest the opposite in each of the cases. |
| Keywords: | Fuzzy regression discontinuity design, nonparametric test, inequality restriction, multiplier bootstrap. |
| JEL: | C12 C15 C21 C24 |
| Date: | 2018–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-623&r=ias |
| By: | James Mabli; Arkadipta Ghosh; Bob Schmitz; Marisa Shenk; Erin Panzarella; Barbara Carlson; Mark Flick |
| Abstract: | Research shows that food insecure seniors suffer adverse health effects at a higher rate when compared with food secure seniors. This study presents findings on the effect that the Nutrition Services Program has on participants’ Medicare-funded health care utilization. |
| Keywords: | Nutrition, Health Care, Food Security, Nutrition Services Program, NSP |
| JEL: | I0 I1 I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:69f04f96924a415ba602494e57dc0b7c&r=ias |